Entertainment

PayPal X Developer Challenge Winners Unveiled

In November, PayPal launched its PayPal X Developer Network, and with it it let a slew of developers into its platform, so that PayPal's backend technology could be integrated into web and mobile applications. PayPal also launched the first PayPal X Developer Challenge and at DEMO yesterday, announced both winners on stage.

PayPal already showed off some of what is possible when you combine its API with an innovative app when it released PayPal Bump last week. I had a chance to talk to Osama Bedier, the Vice President of Product Development at PayPal and both the first and second place winners of the contest to gain more insight into what PayPal is doing for developers and what developers are doing with PayPal's API.

The PayPal X Startup Accelerator

In addition to announcing the winners of the Dev Challenge, Bedier also introduced the new PayPal X Startup Accelerator. PayPal's accelerator is kind of similar to Microsoft's BizSpark program (note: Mashable works with BizSpark in our Spark of Genius Series of Posts) in that it allows startups and developers to gain access to tools, investors and other startups during the incubation phase.

To that end, PayPal is working with the Plug and Play Tech Center in Sunnyvale, California to get PayPal X developers some great connections and support. In the future, Bedier told me that PayPal wants to offer resources to developers all over the world.

I spoke to Bedier at the Future of Web Apps conference last month about the PayPal X program and the new iPhone SDK (which is still in closed beta but will be opening up to the public later this spring) about what PayPal wants to do in the future and quite simply, the company wants to be able to integrate with as many service and business ideas as it can.

Over the last decade, the company has really cracked the nut of doing financial transactions, large and small, and now that the micro-transaction and mobile payments have become a reality (and the primary method of payment in some parts of the world, like Kenya), PayPal wants to work with others to use its infrastructure and backend to help facilitate future projects and future markets.

The Startup Accelerator is really about giving developers and startups access so that they can really make their ideas as good as they can be.

The Winners

The two big winners of the PayPal X Dev Challenge Rentalic and Appbackr are both interesting because they are really innovative uses of digital payments. Both companies have the potential to kick off some genuinely new marketplaces with what they are doing.

Rentalic

Rentalic, which was the first place winner and received $50,000 in cash and $50,000 in waived fees, is kind of like a mashup between Craigslist and eBay — but for rentals. Instead of letting your lawnmower or snow skis sit unused for most or part of the year, why not rent it out to someone local?

Listing items with Rentalic and setting a rental fee (per day, week, month, etc.) is really easy, but the app's brilliance is in how the system can facilitate trust between both parties.

After you list an item, a person can come across your listing and agree to rent it. Using PayPal's API, you can verify that the person has enough money in their account for the deposit (which you can set). Once that's verified, the person renting the item gets a secret code. Only after meeting up in person and verifying that the item is what they want and is as described do they then give the code to the renter. Conversely, if you're meeting in a place where you don't have access to your computer, the person renting the item can call an 800 number, enter in their PayPal account number and then enter in their secret code,

At this point, the renter gets your deposit on the item. After you return the item and it is deemed to be returned intact, the renter just releases the deposit.

Already Rentalic operates in 20 states, and this is with virtually no marketing. The winning funds from PayPal will go towards developing an iPhone app, with other mobile platforms to follow.

Appbackr

Appbackr, which won second place — receiving $25,000 in cash and $25,000 in waived fees — is a developer marketplace for the iPhone App Store, although other platforms will be supported later.

Appbackr was designed to make it easier for indie developers to procure funding and bring apps to market. Let's say you have a really great application, but you either cannot get funding to complete the app or you don't have a way to try to market it and get it in the hands of other people. Conversely, there are some people who really want to build an application but need to be connected to a developer.

The marketplace lets developers show off their applications or ideas and then buyers can buy copies of the app at a wholesale price. Once the app hits the App Store, buyers get a cut of the profits for each application sold. By buying in advance, developers get funding, which they need, and buyers get a piece of the back end action.

The real beauty if Appbackr is that it can connect like-minded markets together. For instance, if I see an app aimed at movie lovers, I might want to invest — buying a few thousand copies at $0.30 a piece. I can then promote that app to my circle of friends once its out to make sure it is successful. For niche markets this can be pretty powerful.

Appbackr uses PayPal to facilitate payments and it plugs into the App Store's backend to keep both parties aware of what's being sold and to keep everyone honest. It's a really, really smart idea that offers developers a way to get funding now, while also allowing the investors to invest in something that they can, if they choose, take a part in promoting.

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